Galleria Pain Physicians, PLLC, DAB CR6702 (2025)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its Palmetto GBA National Supplier Clearinghouse (Palmetto) Medicare Administrative Contractor, revoked the Medicare enrollment and billing privileges of Galleria Pain Physicians, PLLC (Petitioner) pursuant to 42 C.F.R § 424.535(a)(5) based on a site inspection that revealed Petitioner was not operational to furnish Medicare covered items or services.  Because I find that Petitioner was not operational at its business location address on file, I affirm that CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

I. Background

Petitioner is a supplier of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) in Texas.  CMS Exhibit (Ex.) 1.  On January 26, 2023, Petitioner filed a revalidation application of its Medicare enrollment.  Id. at 3.  In that application, Petitioner listed 6021 Fairmont Parkway, Suite #250-B, Pasadena, Texas 77505-4040 (Pasadena address) as its business location.  Id. at 4.

On February 9, 2023, a CMS-contracted inspector conducted a site visit at the Pasadena address to verify Petitioner’s compliance with Medicare enrollment requirements.  CMS Ex. 2.  The inspection revealed that Petitioner was not located at that address.  Id.  The

Page 2

Pasadena address was instead occupied by Peak Performance.  Id.  The inspector spoke with the office manager of Peak Performance who informed her that Petitioner had previously been at the Pasadena address but had moved over six months ago.  Id.

In an initial determination dated March 16, 2023, Palmetto revoked Petitioner’s Medicare privileges effective February 9, 2023 and barred Petitioner from re-enrolling in Medicare for a period of one (1) year.  CMS Ex. 3.

On March 27, 2023, Petitioner requested reconsideration.  CMS Ex. 4.  In the reconsideration request, Petitioner did not dispute that it was not operational at the Pasadena address and included a change request to 251 West Medical Center Boulevard, Suite #230, Webster, Texas 77598-4213 (Webster address).  Id. at 4. The reconsideration request also asked that Palmetto visit the Webster address.  Id. at 1.  On June 16, 2023, Palmetto issued an unfavorable reconsidered determination, concluding that no error was made in revoking Petitioner’s Medicare enrollment and billing privileges.  CMS Ex. 5.

Petitioner timely requested a hearing before an administrative law judge and the case was assigned to Administrative Law Judge Bill Thomas1.  On June 29, 2023, an Acknowledgment Letter and Standing Prehearing Order were issued (Prehearing Order).  The Prehearing Order directed each party to file a prehearing exchange consisting of a brief and any supporting documents, and also set forth the deadlines for those filings.  Prehearing Order ¶¶ 5-6.  In response to the Prehearing Order, CMS filed a brief (CMS Br.), including a motion for summary judgment and five exhibits (CMS Exs. 1-5).  Petitioner filed a letter on August 3, 2023, which I treat as Petitioner’s brief in response (P. Br.).  See DAB E-Filing Docket No. 6.  Petitioner also filed additional documents months after the deadline in January and February, 2024.  Petitioner did not object to my consideration of CMS’s proposed exhibits.  Therefore, in the absence of objection, I admit CMS Exs. 1-5.  Similarly, CMS did not object to Petitioner’s late filings.  As a result, I will consider the entirety of the record before me.

The Prehearing Order explained that “[a]n in-person hearing to cross-examine witnesses will be necessary only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine.”  Prehearing Order ¶ 13; see Vandalia Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB No. 1823 at 7-8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross-examine those witnesses).  The Prehearing Order additionally informed the parties that, if neither party requested cross-examination of a witness, I would close the record and issue my decision once the parties completed their pre-hearing exchanges.  Prehearing Order ¶ 14.  Because neither party offered the written direct testimony of any witness, I decide this case based on the parties’ written submissions, without regard to whether the standards for summary judgment are satisfied.

Page 3

That is, even if there are disputed issues of material fact, I resolve them based on the evidence of record.  I deny CMS’s motion for summary judgment as moot.

II. Issues

The issue in this case is whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

III. Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2); see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

IV. Discussion

A. Statutory and Regulatory Background

For a DMEPOS supplier to receive Medicare payments for items furnished to a Medicare-eligible beneficiary, the Secretary of Health and Human Services must issue the supplier a billing number.  Act § 1834(j)(1)(A) (42 U.S.C. § 1395m(j)(1)(A)).  To receive such direct billing privileges, a DMEPOS supplier must initially comply and maintain compliance with the supplier enrollment standards set forth in 42 C.F.R. § 424.57(c).  Among other things, a DMEPOS supplier must maintain a physical facility on an appropriate site, which is in a location that is accessible to the public, staffed during posted hours of operation, with a visible sign and posted hours of operation.  42 C.F.R. § 424.57(c)(7).  Also, a DMEPOS supplier must permit CMS or its agent to conduct an on-site inspection to ascertain supplier compliance with each enrollment standard.  42 C.F.R § 424.57(c)(8).  A provider or supplier is operational if it “has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked . . . to furnish these items or services.”  42 C.F.R. § 424.502.  CMS will revoke a currently-enrolled Medicare supplier’s billing privileges if CMS or its agent determines that the supplier is not in compliance with any supplier enrollment standard.  See 42 C.F.R. § 424.57(e)(1); A to Z DME, LLC, DAB No. 2303 at 3 (2010); see also 1866ICPayday.com, DAB No. 2289 at 13 (2009) (“[F]ailure to comply with even one supplier standard is a sufficient basis for revoking a supplier’s billing privileges.”).

If an on-site visit reveals that a supplier is no longer operational, or otherwise fails to meet any enrollment requirement, CMS may revoke the supplier’s Medicare billing privileges.  42 C.F.R. § 424.535(a)(5).  The effective date of revocation is the date CMS determines the supplier was no longer operational.  42 C.F.R. § 424.535(g)(2)(iv).  Suppliers that have had their billing privileges revoked “are barred from participating in the Medicare program from the effective date of the revocation until the end of the re-

Page 4

enrollment bar,” which is “a minimum of 1 year, but not greater than 10 years depending on the severity of the basis for revocation.”  42 C.F.R. § 424.535(c).

B. Findings of Fact, Conclusions of Law, and Analysis

1.  A CMS-contracted inspector attempted to conduct a site visit of Petitioner’s business location on February 9, 2023, at the address on file with CMS (6021 Fairmont Parkway, Suite #250-B, Pasadena, Texas 77505-4040); but the inspector found that the location was not open for business.

On or about January 26, 2023, Petitioner’s owner signed a Medicare revalidation application.  CMS Ex. 1 at 3.  The application reported Petitioner’s business location address as 6021 Fairmont Parkway, Suite #250-B, Pasadena, Texas 77505-4040.  Id. at 4.

On February 9, 2023, a CMS-contracted inspector visited Petitioner’s reported business location at the Pasadena address to conduct an on-site review.  CMS Ex. 2.  The inspector documented that the location was not open for business, did not have employees or staff present, and did not have any inventory present.  Id.  Petitioner admits that it was not operating at the Pasadena address and that the business had moved to a new address.  P. Br.

2.  CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5) because Petitioner was not operational at the practice location on file with CMS.

CMS may revoke a currently enrolled provider’s Medicare billing privileges when, upon on-site review or receipt of other reliable evidence, CMS determines that the provider is no longer operational to furnish Medicare-covered items or services.  42 C.F.R § 424.535(a)(5).  A provider is “operational” when it:

[H]as a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.

42 C.F.R. § 424.502.  As an appellate decision of the Departmental Appeals Board (DAB) has explained, to determine whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5), I must answer two questions:  (1) What was the business location address on file with the Medicare Administrative Contractor on the date of the on-site visit? and (2) Was

Page 5

Petitioner operational at that address on the date of the on-site visit?  Care Pro Home Health, Inc., DAB No. 2723 at 15 (2016).

Here, Petitioner’s address on file at the time of the February 9, 2023 on-site visit was the Pasadena address.  The Site Verification Survey Form documenting the inspector’s visit to that address, described above and not disputed by Petitioner, supports the finding that Petitioner was not operational and not “open to the public for the purpose of providing health care related services” on the date of the on-site visit.  Therefore, I conclude that CMS had a legal basis to revoke Petitioner’s enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5).

3.  Petitioner’s argument that a third-party billing company failed to update Petitioner’s Medicare records does not provide a basis to overturn the revocation of its Medicare enrollment and billing privileges.

Petitioner appears to challenge CMS’s revocation by submitting letters showing that a third-party billing company tasked with billing and credentialing failed to update Petitioner’s Medicare address and instead only updated the location of its medical records in a 2019 filing.  See P. Br.  While I accept that Petitioner’s third-party biller may have neglected to update the address of Petitioner’s business location, Petitioner is ultimately responsible for the actions (or inactions) of its agent.  It was at all times within Petitioner’s control whether or not to employ a third-party biller to handle its contacts with Medicare.  Having chosen to employ a third-party biller, Petitioner cannot now disavow that choice.  Cf. Jackson Manor Health Care, Inc., DAB CR545 at 7 (1998) (corporation may not avoid the consequences of the avoidable failure of one of its employees to discharge a duty).

Petitioner’s attempt to blame its billing contractor for failing to update its enrollment record is analogous to cases in which suppliers have attempted to evade the consequences of improper billing by blaming the company that submitted claims on the suppliers’ behalf.  In such cases, appellate decisions of the DAB have stated unequivocally that the supplier is ultimately responsible for the claims submitted.  See, e.g., Louis J. Gaefke, D.P.M., DAB No. 2554 at 5-6 (2013).  I see no reason why that analysis should not apply equally to Medicare enrollment.  See Mark Koch, D.O., DAB No. 2610 at 4 (2014).

Just as suppliers are responsible for the accuracy of claims submitted by third parties on their behalf, so too, suppliers are responsible for the accuracy of information submitted as part of the enrollment process, even if submitted by employees or contractors.  Indeed, each time a supplier submits a Medicare enrollment application, an authorized official of the supplier ‒ not a contractor ‒ must sign a certification statement attesting that the contents of the application are “true, correct, and complete.”  See CMS Ex. 1; see also 42 C.F.R. § 424.510(d)(3); Sandra E. Johnson, CRNA, DAB No. 2708 at 14-15 (2016).

Page 6

4.  Petitioner’s arguments in equity are not a basis to overturn the revocation of Petitioner’s Medicare enrollment and billing privileges.

In the filings submitted in February 2024 after the record had closed, Petitioner states that it was acquired by a new physician, Dr. John Rush, who only then learned about the revocation action.  Dr. Rush alleges that the revocation action was not disclosed to him.  See Buttaci letter dated February 21, 2024, DAB E-Filing Docket No. 8.  Along with the letter, Petitioner provided a copy of an updated enrollment application signed by Dr. Rush and listing the Webster address as the place of business.  See DAB E-Filing Docket No. 8a at 1.  Petitioner also provided a copy of a document that appears to transfer ownership of Petitioner from Kevin Barton to Dr. Rush.  See DAB E-Filing Docket No. 8b.  Dr. Rush argues that the revocation should be rescinded because of the change in ownership.  DAB E-Filing Docket No. 8 at 1.  However, I do not have authority to take such action.  42 C.F.R. § 424.535(c)(4) provides that a reenrollment bar applies to a supplier or provider under its current, former, or future business identities.  Further, the change in ownership was not raised until after the issuance of the initial determination and the reconsidered determination.  Here, the initial determination was issued March 16, 2023, and the reconsidered determination was dated June 16, 2023.  The change of ownership documents were not filed until November 16, 2023.

Lastly, although ultimately conceding that its Medicare enrollment information was not updated timely, Petitioner argues that it provides exceptional care to Medicare beneficiaries and that it would be a disservice to such beneficiaries if Petitioner is unable to provide services.  See CMS Ex. 4 at 5. I construe these arguments as an appeal to equity.  In other words, Petitioner is arguing that revocation of its Medicare enrollment is unfair under the circumstances.  However, an administrative law judge is not authorized to provide equitable relief by reimbursing or enrolling a supplier that does not meet statutory or regulatory requirements.  US Ultrasound, DAB No. 2302 at 8 (2010) (citing Regency on the Lake, DAB No. 2205 (2008)).  I therefore find no basis to overturn Palmetto’s reconsidered determination.

V. Conclusion

For the foregoing reasons, I affirm CMS’s determination to revoke Petitioner’s Medicare enrollment and billing privileges.